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MoD forced to write off £6.7m after IT fiasco

Capita to pick up an extra £47.7m contract to fix the problem

The Ministry of Defence (MoD) has had to write off £6.7m after suffering "big problems" with an IT project, as well as cough up an extra £47.7m for Capita to put the problem right.

Back in March 2012, the MoD teamed up with Capita to manage an Army recruitment project on a legacy Atlas platform, but last summer the Army flagged up a range of serious technical problems it was having. The project was set to deliver Army recruitment services and online resources in order to free up Army personnel.

Today, speaking the House of Commons, defence secretary Philip Hammond said that due to the technical problems which had been encountered, the government had decided to revert to its back-up plan - for Capita to run the IT systems.

The Army recruitment project is set to be worth £1.3bn over a ten-year period to Capita, which will now rake in another £47.7m as it takes over the IT portion of the deal too. In Parliament today, Hammond conceded that £6.7m would have to be written off due to scrapping its initial plan and having to revert to Capita.

"The decision to use the legacy Atlas platform was, at the time, deemed to be the quickest and most cost-effective way of delivering the programme [but] the option to revert to the Capita solution was included as a backup," he told the Commons.

"I was made aware in the summer of last year that the Army was having problems with the Atlas platform and since then a number of workarounds have been put in place to simplify the process."

Capita's replacement IT system is not expected to be complete until next year, and Hammond admitted that the cost of the extra manpower and workarounds was £1m per month - a cost which will continue to be incurred until the new system is in place.